Toxic links are links from low-quality websites, spam directories, automatically generated pages, or networks created solely for linking. There is more panic surrounding them than actual risk: search engines have long since learned to simply ignore such links, so the mere presence of spammy links mostly has no negative effect, and the disavow tool does not need to be used. Taking action makes sense in two situations – if you have received a manual action notice for low-quality links, or if you yourself previously built links in a way that violated the rules. In that case, a list of domains for disavowal is prepared, together with a reconsideration request. Disavowing links across the board without reason will do more harm than good.
See also: Backlink profile, PBN and risky practices, Link exchange.